Why you should optimize your business processes
We know it’s been a rough time for business all over the world – the recent economic situation has left its marks from USA to Europe and India to Japan. While most of the world is slowly recovering, some are still coping with the economic slowdown, resulting in the creation of great pressure on small to large enterprises in maintaining their bottom-line profitability. As it appears from a global socio-political perspective, it’s not going to be any easier in the future either – which is why operations need to be more effective than ever. No matter how hard it is out there in the market, a wholesome process management with constant optimization will always be a pathway through.
Considering this scenario, companies are left with roughly three choices – first is to fall under pressure and eliminate the loss-making departments or declare bankruptcy; second is to innovate and move into profitable ventures; and the third is to find ways to improve efficiency by optimizing business processes and plugging the leaks, cleaning the gunk and simplifying the entire organization or departments by eliminating the wasteful processes.
To that end, the typical company has applied substantial effort to identify and at a minimum, document their processes (document-based processes). In business process optimization, processes can be divided into three parts: Core Processes, Support Processes and Management Processes. Core processes identify primary value for customers in the organization such as manufacturing, sales and purchases. Support processes provide support to the core processes such as human resources, IT, accounting, research and development etc, with management processes controlling and governing both processes.
The main characteristic is that business process optimization looks into ways to improve the processes in the existing structure – it is a preventive technique to fine tune the business from possible constraints or losses.
All right, but how?
Necessary as it sounds, when optimizing a business process there is never an easy way. It requires taking a critical look at an organization’s operations and minimizing the resources required to get things done. Luckily, the guys from Laserfiche analyzed the subject and listed three steps to optimizing an organization’s business processes:
Phase 1: Identify.
It is important to keep in mind that only the document-based processes can be optimized. Once you determine which of them needs an overhaul, the first step is to list out all the key components of the process. These should be fundamental, unchangeable aspects of the process. To identify key components, ask yourself these questions:
- What is the goal or desired outcome of this process?
- When does the process begin and end?
- What activities move the process forward?
- What departments and/or employees are involved?
- What information is being transferred between steps?
For instance, the following questions should be answered in the case of an employee hiring:
- The goal: To hire a qualified candidate for the job.
- It begins when an application is received and ends with the decision to hire or reject.
- Activities: Application reviews, interviews, approvals and rejections.
- Departments and employees involved: HR and the applicable department managers.
- Information transferred: Applications, resumes, cover letters, interview dates/times and notes from reviewers.
Note that the answers don’t address how the process is done, only what is done.
Phase 2: Rethink.
This phase should address your unique methodology and reveal potential areas for improvement. Think about every step that is involved in the business process you’re analyzing, then ask the following questions:
- How many man hours are required to complete the process?
- Of those hours, how many are spent doing redundant or extraneous work?
- How many copies of the same document are made?
- Where does the process stall and why?
- When do errors occur?
Compare these answers against your key components list. You’ll realize tasks that seem essential, like photocopying a document for every department manager, don’t actually align with the process goal. You’ll also realize that correcting an error is only essential if an error is made—eliminate the error, and you eliminate an extra task that does nothing to drive the process forward.
The intention of business process optimization is to reduce or eliminate time waste, resource waste, unnecessary costs, bottlenecks and errors while achieving the goal of the process. But until you know how this can be accomplished, you’re stuck in dreamland.
Phase 3: Automate.
Repeat unnecessary tasks, and workflow stalls. Repeat successful tactics, and business flourishes. Once you’ve separated the essential from the non-essential in your business process, it’s time to apply a solution. But if this is your first experience overhauling a document-based process, you might feel daunted by the possibilities. You could even worry that you’ll make more mistakes if you alter the process than if you just leave it alone – in this case you might want to leave this work to professionals.
Most companies today are well aware that their business processes are key to their competitive success. They also know they are central in acquiring new customers, keeping existing customers happy over the long term, all while reducing expense. Therefore, it is an alert call for every business or the governing department to review the way they operate or function. Even if they are doing well it is only a matter of time before they must do a periodical check-up of their business processes, the way we do for our health check-ups or tune-up of our automobiles.